Ophthalmology Business

OCT 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

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Page 20 of 27

T
here are now more
than 5,200 ambulatory surgery centers in
the United States.1
The number of ASCs
continues to grow because surgeons
are attracted to the prospects of
an additional income stream and
enhancing the quality of their work
environment. In reality, however,
too few physician owners are actually receiving additional income.
Problems with cash flow and ASC
management concerns often overshadow any improvements in work
environment and direct energy away
from growing their own practices
and delivering quality care to their
patients. This happens all too often;
approximately one-third of ASCs are
profitable, another third are barely
breaking even, and the remaining
third are actually losing money and
may be at risk of a hospital or management company buyout.2
Why do the advantages of ASC
ownership fail to materialize? There
are a number of reasons why an ASC
fails to deliver on its promise—or
fails altogether—but most are characterized by failure to adequately manage and control the revenue cycle. In
light of the disparities in reimbursement (an ASC is reimbursed at only
56% of what a hospital outpatient
department receives for the same
procedure) and margins (smaller for
the ASC, relative to the hospital),
leaving money on the table is a
recipe for ASC failure. Control of the
revenue involves efficient billing
and collections, effective insurance
contracting, and keeping abreast of
government regulations. All three of
these critical functions require specialized attention, something not
always readily available to an ASC
without outside assistance. Access to
these specialists may be one of the
best reasons for physician-owned
ASCs to outsource revenue cycle
management.
The possibility of outsourcing
billing and collections may be suggested as the "cure" for an ailing
ASC's cash flow. Before making a
decision, consider what is involved
in managing the revenue cycle, as
well as the relative merits of keeping
them in-house or outsourcing.
Billing and collections
Upfront collection is one critical—
and often neglected—step in this
aspect of managing the revenue
cycle. High deductibles and co-payments are becoming increasingly
common, and collecting from the
patient can be more difficult and
time consuming. To get out in front
of the process, many facilities require
patients to pay the amount for
which they are responsible on or
before the day of surgery. In our
experience, facilities that collect on
the day of service report a much
lower percentage of bad debt than
those that wait to see what insurance
pays then send a statement to the
patient 30 to 90 days after the date
of service.
• A billing agency can assist with
this process from offsite by verifying the patient's insurance before
the day of surgery and calculating
the patient's estimated financial
responsibility. They communicate
this information to the patient or
to the ASC staff before the day of
surgery so that all parties are aware
of what will be collected at the
time of service. The check-in
process is smoother and the focus
turns to patient care rather than
money.
Accurate coding is essential.
Unlike professional services that bill
using a Super Bill that the physician
or scribe has completed, the facility
claim is typically coded using the
Operative Note dictated by the surgeon. Experienced coders are not all
that easy to find and can expect to
be well-compensated for their training and experience, but an incorrectly coded claim can be responsible for
leaving money on the table and may
result in legal liability.
• Agencies generally retain experienced coders, require them to be
certified, and guarantee the accuracy of their coding services.
Follow-up of a rejected claim
often proves to be the weak link in
the process. Discomfort with asking
for payment, working with aging balances, time constraints due to workload, and the attitude that the claim
will still be there tomorrow to work
on—or not—all result in significant
disruptions in the revenue cycle. The
number of claims requiring follow-up
and the total dollar amount they
represent add up quickly.
• An agency assigns experienced
personnel to work this essential
step of the process. Persistence,
attention to detail, and dedication
to this function keeps those numbers as low as possible.
Reporting is a key element in
determining how well your facility is
doing. Many trade organizations
publish statistics and industry
benchmarks to which performance
can be compared. Days in A/R, collections to charges, and the percent
of A/R in each aging category are a
few of the more common ratios and
averages to monitor monthly, quarterly, and annually.
• An agency provides monthly
financial reporting that makes it
easier for owners to track those
numbers and benchmarks and
measure how well they are doing.
Contracting
Medicare and other government payers use the CMS allowable based on
location and do not negotiate pricing, but your contracts with commercial payers dictate what your
continued on page 22
October 2013 • Ophthalmology Business
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